News

Survey finds 93% of councils have issued no penalties for failure to display letting agent fees

Thursday, June 1, 2017 -
National Approved Letting Scheme

Two years after it was made law for agents to display their fees, a National Approved Letting Scheme (NALS) survey of local authorities has found that 93% of councils have failed to issue a single financial penalty for non-compliance to letting agents.

The NALS survey based on Freedom of Information requests asked local authorities a number of questions on the Consumer Rights Act legislation on the display of fees and how it was being enforced.

Of the councils surveyed across England, only three penalty notices have been served for failure to display all relevant landlord and tenant fees, and of these, only one has been paid in full. The lack of notices served by councils raises clear concerns that the level of penalty may not be right to cover the cost of enforcement. Currently, the maximum penalty is £5,000.

The Private Rented Sector is recognised as a priority for Government but this doesn’t seem to be filtering down to local councils where most (59%) admitted they do not consider the display of letting agent fees represents a high priority for the allocation of resources within Trading Standards. Almost half of local authorities (45%) said they only undertake reactive enforcement activity.

A third of local authorities (33%) allocated no staffing resources to this work in 2016/17, while 62% anticipate no changes in the level of staffing resources in 2017/18.

The research also raises questions about how any future fee ban would be enforced, with two thirds of local authorities (64%) revealing they haven’t yet assessed the likely impact on enforcement when the Government introduces a ban on letting fees to tenants. With changes to fees likely in the next 18 months, NALS is urging Government to act now to ensure local authorities recognise the importance of effective enforcement in the PRS and that they are sufficiently funded.

Isobel Thomson, Chief Executive of NALS said:

“We’re clearly concerned by these results and the disconnect between Government’s aspirations with consumer protection legislation and the reality of delivery through enforcement. We recognise Trading Standards teams are underfunded and under-resourced, but if local authorities aren’t enforcing the current legislation what will make things different when the fee ban is implemented?

“Without sufficient robust and coherent enforcement action, we will never stop the criminal element in the PRS. They will continue to operate knowing they won’t face any penalty and it’s the consumer who will continue to suffer. We believe now is the time to start a constructive dialogue with the Chartered Trading Standards Institute and its members on how we can work together to stamp out the rogues.”

“CTSI welcomes the research produced by NALS and believes that it highlights the issues of the robust enforcement needed for existing regulation that can deliver for the consumer. We look forward to further engagement with NALS”.

The letting fees survey was undertaken by housing consultancy London Property Licensing on behalf of the National Approved Letting Scheme (NALS).

The survey was undertaken in April / May 2017, involving a sample of English local authorities that have responsibility for Trading Standards. Included in the survey were County Councils, Metropolitan Districts, London Boroughs and Unitary Authorities.

Each local authority was sent a freedom of information request seeking information on Trading Standards enforcement relating to the display of letting agent fees, as required under the Consumer Rights Act 2015. The legislation has been in force since 27 May 2015.

The results are based on responses from 42 local authorities, as of 11 May 2017.